IFRS For SMEs Research Articles

Maintaining and extending hegemony: The politics of accounting standard setting

This paper offers a critical analysis of the politics of accounting standard setting. The International Accounting Standards Board (IASB) hold an increasingly monopolistic role in accounting regulation across the globe, and make claims to transparency, neutrality and superior expertise to legitimize their hegemonic position. In 2009 the IASB extended their standard setting beyond listed entities to the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs). This paper explores the political antagonisms surrounding this extension, finding that the IASB undertook this project to block counter articulations from several bodies. To unpack the politics of the IASB’s extension this paper draws on Laclau and Mouffe’s hegemony and Glynos and Howarth’s political logics, to argue that the IASB maintain and extend hegemony by dismissing and blocking alternatives through the rhetoric of superior expertise, which ultimately enables them to extend ideologies of advanced financial capital and capital markets to new spaces.

Transformation of financial reporting of small enterprises according to IFRS

Introduction. Small businesses play an impor­tant role in ensuring the economic stability of Ukraine, but during the war they are in a difficult situation and need support. 
 Problem. For small enterprises, overcoming existing problems is possible thanks to cooperation with European companies, investors, counterparties, international financial organizations, entering foreign markets, attracting capital, participating in grant projects, startups, etc., but this requires a transition to international accounting standards and the transformation of financial reporting. 
 The aim of the article is to highlight the peculiarities of the transition of small business enterprises to international accounting and reporting standards and to find practical recommendations for improving the transformation of financial reporting. 
 Methods. During the research, general scientific and special methods were used, in particular: induction, deduction, comparative analysis, synthesis, generalization, grouping, abstract logical methods. 
 Results. The sequence and scheme of the transition of small business enterprises from national accounting and reporting standards to international ones is analyzed, the stage of transformation of simplified financial reporting into reporting according to the International Financial Reporting Standard for Small and Medium Enterprises (IFRS for SMEs) is highlighted. The characteristics of financial reporting transformation procedures, examples and features of reclassification of individual accounting objects and reporting items, typical for small enterprises, are given. An amendment table is provided for the transformation of the financial statements of a small enterprise into reporting according to international standards. 
 Conclusions. The transformation of the financial reporting of a small business entity into reporting according to international standards involves a number of organizational and technical measures to reformat the accounting policy, adjust the accounting system and digitize it according to new rules and approaches, etc. The proposed corrective table helps control the reporting transformation process and track the relationship between the changes made, promotes information disclosure and reporting transparency.

Evolution of accounting rules for Small and Medium-Sized Business Entities

The object of this study is problematic issues regarding updating accounting rules in small and medium-sized businesses (IFRS for SMEs) in digitalization. The authors give a critical analysis of significant simplifications in the accounting system and accounting (financial) reporting in the Federal Accounting Standards (FSBU) and other legal acts regulating the accounting and reporting of small and medium-sized businesses. Based on the results of the work, the authors concluded on the advisability of applying certain simplified requirements for the formation and disclosure of financial information by small businesses, considering a thorough check of each of them for negative consequences in the usefulness’s context of this information; the lack of demand for “outdated” recommendations was revealed and the rationality of their cancellation was substantiated. The research showed that in the use’s context of digital technologies, additional IT opportunities are being formed to ensure the information transparency of SME activities and improve the quality of reporting information in sustainable development. The opinion about necessity to develop a separate Federal Accounting Standard for small and medium-sized businesses is substantiated. In the study’s course, the authors applied the methods of analysis, synthesis, comparison, systematic and logical approaches, accepted accounting principles that ensure the usefulness of information for interested users. The obtained results are aimed at the development of accounting practices in the new economic conditions.

The Impact of an IFRS for SMEs-Based Standard on Financial Reporting Properties and Cost of Debt Financing: Evidence from Swedish Private Firms

In 2014, all larger Swedish private firms were required, at short notice, to adopt a new reporting standard (K3) based on IFRS for SMEs (2009 version). Using this shock to the reporting environment, we study the effects of the new reporting standard on groups’ financial reporting properties and cost of debt financing. We find that, following the introduction of K3, private groups exhibit reporting changes consistent with improved accounting quality; their financial statement comparability increases; and their cost of debt declines. Our results suggest that the cost-of-debt decline is related to changes in accounting numbers that are imputed to lending models. Our findings add to the literature on factors shaping private firms’ financial reporting and inform the ongoing discussion on accounting regulation for private firms.

Issues and Challenges of Adoption of IFRS for SMEs in Malaysia

The purpose of this research is to look into issues and challenges associated with the adoption of International Financial Reporting Standards for Small and Medium Enterprises (IFRS for SMEs) or so-called MPERS (Malaysian Private Entity Reporting System). Using keywords like "IFRS for SMEs," "MPERS in Malaysia," and so on, this study examines existing literature in the form of articles in the Emerald database, as well as press releases and publications published by the Malaysian Institute of Accountants (MIA). The MPERS version of IFRS is a shortened version of the complete IFRS. It reduces the substance of the whole IFRS by about 85%. Certain topics are excluded because they are not normally relevant to SMEs. SMEs, on the other hand, still consider IFRS for SMEs to be excessively complicated. MPERS is a performance-based standard, not a cost-based one. Almost everything must be of reasonable value. As a result, businesses owning investment properties or biological assets will have to pay extra for the valuation of these assets at fair value. For preparers, there are two major obstacles to overcome. Constant changes in standards, as well as a scarcity of skilled accountants, are also issues. Some data suggests that the decision usefulness model is inappropriate for smaller businesses. SMEs have a small number of account users, lack accounting competence to deal with complexity, and are managed by their owners. Furthermore, for SMEs, a reporting approach focused on stewardship and employing simplified historical cost accounting would be more appropriate.

Discussion of ‘Multi-mode standardisation and comparability: Norway’s failed attempt to adopt the IFRS for SMEs’

Discussion of ‘Multi-mode standardisation and comparability: Norway’s failed attempt to adopt the IFRS for SMEs’

Institutional pressures, legitimacy, risks, uncertainty and voluntary adoption of IFRS for SMEs in Vietnam

The purpose of this study was to determine the impact of institutional variables, risks, and dependence on the voluntary application of international financial reporting standards. The study used a quantitative research method based on regression analysis, with data obtained from a survey from among Vietnam's small and medium businesses. The findings confirmed that legitimacy, dependence, consistency, time, international trade, uncertainty, operational risk, financial risk, and industry all have a positive impact on the ability to voluntary application international financial reporting standards, with the exception of flexibility, which has a negative impact. The findings of the study have consequences for stakeholders in making proper policy decisions about the application of the International Financial Reporting Standards.

Factors Affecting the Adoption of Financial Reporting Standards by Micro, Small and Medium Enterprises in Tanzania: The Case of Mbeya City Council

Different studies have revealed that the majority of the micro, small and medium enterprises (MSMEs) in Tanzania do not use basic accounting principles and practices which are consistent with financial reporting standards in managing business though Tanzania adopted International Financial Reporting Standards for small and medium enterprises (IFRS for SMEs) in 2009 and issued financial reporting standard for Micro entities in 2018. This shows that the level of adoption and applicability of the standards is very low. Therefore, this study was carried out to assess factors that affect the adoption of financial reporting standards by MSMEs in Tanzania. The study was conducted in Mbeya City Council where primary data was collected from a sample size of 245 respondents via a Likert scale questionnaire. The descripto-explanatory research design was employed where the results were quantitatively analysed through descriptive statistics and chi-square (x2) model hypothesis testing. The results show that non-adoption of the standards was the result of inadequate knowledge by MSMEs, lack of awareness by most MSMEs on the existence of the standards, high perceived cost of conversion and implementation, weak legal and regulatory enforcement strategy, low level of technology applicability by SMEs and complexity of the standards as it needs a well-trained accountant to implement. The study recommends the government to come up with the implementation strategy that will first ensure that a large number of MSMEs is well trained on financial reporting standards because the decision to adopt or not to adopt largely depend on the adequacy of knowledge.

International financial reporting standards, domestic debt finance and institutional quality: Evidence from developing countries

AbstractWe have examined the relationship between international financial reporting standards (IFRS and IFRS for SMEs) and domestic credit to the private sector by banks. Using data on 107 developing countries from 2000 to 2017, we found that the use of IFRS and IFRS for SMEs is positively associated with an increase in domestic credit to the private sector in developing countries. Our analysis on the individual global standards shows that the relationship is much stronger for the use of full IFRS than IFRS for SMEs. We found that the effect of both international standards on domestic credit is more profound in countries with weaker institutional quality, indicating the overwhelming support that these sets of international standards are quality standards that boost confidence in financial statements. Other robustness tests confirm our results.

Deferred Tax Accounting for SMEs: Modified Income Statement Approach

Purpose: Accounting for income tax under International Financial Reporting Standards (‘IFRS’) is dealt with in IAS 12 Income Taxes. It is often said that users of financial statements do not find information produced in accordance with IAS 12 useful. This is a serious problem because for many businesses tax is one of the largest expenses. In some cases, preparers find the requirements of IAS 12 difficult to apply in practice. Its requirements are said to be unclear, and preparers sometimes question the relevance and understandability of the information that is provided in accordance with the standard. The IFRS for SMEs currently require use of balance sheet approach for accounting of deferred taxes. In India, the Institute of Chartered Accountants of India (ICAI) – the apex standard-setting body in India, is formulating revised accounting standards for SME’s in India. This article examines an alternative to the balance sheet approach which is less complicated and easy to implement.[Reviewer1] [AB2] Methodology: This article proposes a new method i.e. Modified Income Statement Approach. This method is a mix of income statement approach and balance sheet approach, as it requires recognition of deferred taxes using temporary difference approach but calculated using income statement and the other comprehensive income (in effect, Comprehensive income statement). Modified Income Statement Approach requires comparison of tax expense with the underlying related income and expenses so that they are recognized in the same period. In doing so, it also considers income and expenses recognized in the income statement as well as the Other Comprehensive Income. Hence, this approach is more of temporary difference approach but applied by using income statement method. It covers all items of timing differences and most items of temporary differences. The SMEs have less complicated structures and transactions. Also, in many countries, including India, there exists no concept of tax balance sheet. Hence, it would be worthwhile to ease-out the deferred tax accounting for SMEs. The hypothesis is that application of modified income statement approach can result in similar outcome as the balance sheet approach.Findings: A survey of 50 top companies in India was conducted. The results show that 60% of the companies would have recognized the same deferred tax asset/ liability under both the methods i.e. modified income statement approach and balance sheet approach. Balance 40% had some minor differences, but such transactions may be less frequent for SME. On an average, the impact of using modified income approach as against balance sheet approach is a mere 4%. The only items not covered by the modified income statement approach as against the balance sheet approach are Fair valuation of assets/ liabilities on business combination, Compound financial instrument and the existence of undistributed profits of subsidiaries, branches, associates and joint arrangements[Reviewer3] .[AB4] Unique contribution to theory, practice and policy: [Reviewer5] [AB6] To balance out the cost and benefits of implementing an accounting standard as per the framework, it is critical that SME’s use a simpler and less complicated method which is easy to understand and implement. Modified income statement approach is easy to apply and not complicated or technical to understand. In India, companies are used to calculating deferred tax using income statement approach. Hence, this will be a small change from the existing approach, while achieving the objectives of the balance sheet approach. Hence, modified income statement approach seems to be an appropriate method for SMEs.

Tratamiento de beneficios post-empleo bajo las NIIF en las compañías de transporte de carga pesada

Se tiene como objetivo elaborar un manual de procedimientos contables y tributarios para el tratamiento de beneficios post-empleo en las compañías de transporte de carga pesada en el Cantón La Troncal bajo NIIF para PYMES y la revelación de información sobre beneficios a empleados. De tipo descriptiva no experimental con diseño de campo. Los empresarios se enfocan en el cumplimiento de las obligaciones tributarias a fin de evitar sanciones por parte de la administración tributaria como multas, clausuras, suspensión de actividades, decomisos o incautaciones, dejando en segundo plano la contabilidad. Es importante la contratación del actuario independiente calificado por los organismos de control para el cálculo de la reserva matemática actuarial de las reservas por jubilación patronal y desahucio, son estos profesionales los que tienen la experticia necesaria para valoración de pasivos laborales.

Incidencia del flujo de efectivo en las decisiones empresariales de las estaciones de servicio

La investigación tuvo como propósito diseñar una guía metodológica para la elaboración del estado de flujo de efectivo por el método directo bajo las NIIF para PYMES que aporte información para la toma de decisiones en las empresas de combustibles de la ciudad de Cuenca. se desarrolló bajo un tipo descriptivo no experimental. el 62.5% de administradores (ver figura 3) no analizan el estado de flujo de efectivo para la toma decisiones. se pudo comprobar que la mayoría de los administradores de las estaciones de servicio de la ciudad de Cuenca, no toman sus decisiones con base al estado de flujo de efectivo si no respaldan sus decisiones en el estado de resultados, lo que evidencia el desconocimiento de la información que proporciona el estado de flujo de efectivo para la gestión adecuada de los recursos financieros.

Análisis del impacto financiero y tributario a partir de la valuación de inventarios bajo NIIF en la empresa VETNAR S.A

Recibido: 1 de septiembre de 2019Aprobado: 30 de septiembre de 2019La siguiente investigación tiene como objetivo diseñar los procedimientos adecuados para la valuación de inventarios bajo NIIF para PYMES en la empresa VETNAR S.A del cantón Naranjal, provincia del Guayas, a fin de que mejore la confiabilidad de la información de los balances y determinar el impacto financiero y tributario. La aplicación de las NIIF para Pymes, faculta a la empresa elaborar y presentar los estados financieros con información real y razonable, permitiendo reconocer el tratamiento contable del inventario, y el importe del costo, como un activo. Además estos procedimientos de valuación de inventario proporcionaran información sobre la rotación de cada producto y el margen de utilidad.

Impact of Full IFRS, Accounting Standards for SMES and Company Demographics on Firms’ Return on Asset and Return on Equity using Panel Data Regression

Due to globalization, markets are becoming more interconnected as the companies are engaged in doing cross-border offerings. Currently, competitions are intensified because Domestic organizations discover themselves competing with each nearby opposite numbers and worldwide companies. But one component that hinders SMEs is the need for reliable and similar monetary data. According to Abarca (2014), adoption of a high-quality and consistent set of accounting requirements is critical so as for the businesses to remain competitive in ASEAN member states. This paper ambitions to answer the query, what modified into the extent of the impact of compliance with full IFRS and IFRS for SMEs on profitability of agencies belong to real property enterprise? This paper moreover sought to decide whether there may be a sizeable distinction among the groups’ compliance with the overall PFRS and the PFRS for SMEs and to determine whether or now not there is a massive distinction among the companies’ financial normal overall performance earlier than and after the adoption of the PFRS for SMEs.Paired T-test have become employed in case you need to determine whether there is a big distinction between the agencies’ compliance with the entire PFRS and the PFRS for SMEs and to decide whether or not there may be a big difference some of the groups’ monetary performance earlier than and after the adoption of the PFRS for SMEs. Using STATA, the great appropriate version for every economic ratio on the subject of degree of compliance emerge as determined on. First, take a look at parm command became used to find out which most of the Least Squares Dummy Variable Regression Modes (LSDV1, LSDV2, LSDV3) underneath the Fixed Effects Model is the ideal version. Afterwards, Hausman Fixed Random Test changed into used to pick out out which is more suitable amongst Fixed Effects Model and Random Effects Model. If Fixed Effects Model modified into the more appropriate one, the Wald’s test turn out to be used to determine the best version among Fixed Effects Model and Ordinary Least Squares Model. On the alternative hand, if Random Effects Model became the more suitable one, the Breusch and Pagan Lagrangian Multiplier Test for Random Effect have become used to decide the satisfactory version amongst Random Effects Model and Ordinary Least Squares. Moreover, if Ordinary Least Squares became the splendid model, it is going to be in addition tested to check for heteroscedasticity and multicollinearity. White’s test became used to check for heterescedasticity and Variance Inflation Factor have become used to test if multicollinearity is gift. The results display that the adoption of PFRS for SMEs stepped forward the compliance of Philippine real property SMEs. However, no vast alternate became said inside the financial average performance of those companies (as measured with the resource of cross back on assets and go back on equity). This was further supported by the results of the panel regression. This means that despite having a relatively

Accounting Practitioners' Attitudes toward Accounting Harmonization: Adoption of IFRS for SMEs in Italy

ABSTRACTThis paper explores the logics that drive the attitudes of certified accounting practitioners for small firms (CAs) toward new accounting standards. It then unravels the heterogeneity within the accounting profession surrounding the accounting harmonization process. Through analysis of an extensive survey of 1,268 Italian CAs and of ten interviews with presidents of local professional associations regarding an ongoing accounting harmonization project (i.e., the IFRS for SMEs), we first document the coexistence of competitive logics in driving CAs' attitudes toward the new accounting standards. Second, we demonstrate the role of social characteristics in fragmenting the community of accounting professionals, particularly in expressing heterogeneous views on the IFRS for SMEs. This paper contributes to the literature on the relation between the accounting profession and accounting harmonization by illustrating the multifaceted attitudes of CAs toward a project of accounting harmonization. The results are also informative to policy makers in understanding the adoption and implementation process of new accounting standards.

Pautas para el manejo de inventarios bajo NIIF en pymes comerciales en Colombia

Colombia es un país con una economía que tiene como base las PYMES, se presentan procesos que necesitan guiarse bajo las normas NIIF, como es el caso de las secciones de inventarios (sección 13), de acuerdo con esto se planteó como objetivo proponer pautas de control y dirección necesarias para el manejo de los inventarios para PYMES. Método fue el cualitativo que permitió reconocer las posibles causas que impiden a las Pymes alcanzar estándares de calidad en inventarios. Los resultados dieron a conocer la falta de administración y control para el manejo de los inventarios tanto en la bodega, como en el almacén de los productos veterinarios, concluyéndose que la no adopción de las normas internacionales no les permitió ejercer con propiedad unas buenas políticas contables administrativas bajo NIIF para pymes y para ello fue necesario sugerir unas pautas de control en sus políticas de manejo de inventarios

La auditoría financiera: su importancia en las pequeñas y medianas empresas

Las pequeñas y medianas empresas (PYMES), por disposición de la Superintendencia de Compañías, Valores y Seguros del Ecuador (SC), a partir del 1 de enero de 2012 deben aplicar las Normas Internacionales de Información Financiera para Pequeñas y Medianas Empresas (NIIF para PYMES); éstas normas procuran se genere información financiera transparente y confiable tanto para clientes externos como internos; para lo cual se requiere información auditada que la certifique. La investigación tiene como finalidad revisar los principales referentes teóricos de la auditoría que permita a los lectores determinar su importancia en las PYMES, en este sentido se puede concluir que la auditoría permite evaluar el control interno, determinar debilidades y detectar fortalezas para evitar fraudes y corregir errores contables como duplicidad de asientos, mala asignación de cuentas, omisión de asientos, registro de valores incorrectos, entre otros. Palabras clave: Auditoría financiera, información financiera, control interno, PYMES. URL: http://revistas.uta.edu.ec/erevista/index.php/bcoyu/article/view/656

Agenda Entrance Complexity in International Accounting Standard Setting: The Case of IFRS for SMEs

Features of rational decision making (such as agenda entrance criteria and statement of jurisdiction) barely conceal the complexity of international accounting standard setting. In 2003, when the International Financial Reporting Standard for Small and Medium‐sized Entities (IFRS for SMEs) project achieved agenda entrance, the International Accounting Standards Board's (IASB) jurisdiction was to develop, ‘a single set of … accounting standards … to help participants in the world's capital markets’. Drawing on interviewees' recollections and other material, this study of how the project achieved agenda entrance finds within‐IASB opposition to the project, arguing it was outside the IASB's jurisdiction that dissolved with the realisation that the IASB's jurisdiction would be changed to encompass the project.

The effect of IFRS for SMEs on the financial reporting environment of private firms: an exploratory interview study

I investigate how the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) contributes to the development of private firm financial reporting. I interview a sample of leading accounting experts from 24 jurisdictions around the globe to understand the role of private firm financial reporting and financial transparency in their jurisdiction as well as the importance of IFRS for SMEs. I find significant variation across jurisdictions in my sample and document that IFRS for SMEs predominantly influenced private firm financial reporting and transparency by serving as a blueprint for national regulatory reforms. In some jurisdictions, IFRS for SMEs has also been adopted as an optional reporting framework. Direct firm-level adoption of IFRS for SMEs has been low in these jurisdictions with the exception of South Africa where it seems to be used relatively widely. Based on my response data, I suggest some potential rationales for my findings and discuss potential reasons for the observed cross-jurisdiction variation in private firm financial transparency and IFRS for SMEs adoption.

‘The effect of IFRS for SMEs on the financial reporting of private firms: an exploratory interview study’: a practitioner’s view

‘The effect of IFRS for SMEs on the financial reporting of private firms: an exploratory interview study’: a practitioner’s view